Resource Allocation Models

Robust Portfolio Methods for Risk-Based Counterterrorism Resource Allocation

Don N. Kleinmuntz Research Professor of Policy & Management Research Professor of Industrial & Systems Engineering Center for Risk and Economic Analysis of Terrorism Events University of Southern California

2009 DHS University Network Summit March 17, 2009

National Infrastructure Protection Plan Risk Management Framework

? Assess Risks

? Determine risk by combining potential direct and indirect

consequences of a terrorist attack or other hazards,

known vulnerabilities to various potential attack vectors,

and general or specific threat information

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National Infrastructure Protection Plan Risk Management Framework

? Prioritize

? Aggregate and analyze risk assessment results to develop a

comprehensive picture of asset, system, and network risk,

establish priorities based on risk, and determine protection

and business continuity initiatives that provide the greatest

mitigations of risk

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Protecting Critical Infrastructure

BOTTOM-UP

Level

Federal Government

Decisions

Allocate resources across sectors and regions (states or urban areas)

TOP-DOWN

State/Local Government

Allocate resources to specific facilities and asset

Facility & Asset Owners/Managers

Identify and implement risk management measures and programs

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Prioritizing Grant Money for Infrastructure Protection

? Buffer Zone Protection Program (BZPP)

? DHS grant program provides funds to State and local authorities to prevent attacks and protect critical infrastructure

? Total funding in FY 2006: $48.0 million (FY 2007: $48.5 million) ? One of several DHS infrastructure protection grant programs

? Example: (all numbers approximate)

? California Governor's Office of Homeland Security (OHS) proposes 100+ critical sites (chemical facilities, financial institutions, power plants, dams, stadiums, etc.)

? DHS amends and approves final list of about 100 sites ? DHS allocates roughly $5 million in BZPP funds to state, based

on number, type and character of sites ? OHS determines how to allocate among qualified site ? How should they do it?

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